Can someone explain Romny's tax plan?

[head of joaquin]

Then how do people with jobs drop into the zero tax bracket if this is an impossibility?

The earned income credit, a GOP idea, which now Romney claims reward people who don't take responsibility for their live like rich people who inherit their money do.

 

[Fisher]

The earned income credit, a GOP idea, which now Romney claims reward people who don't take responsibility for their live like rich people who inherit their money do.

I am well aware of that. I was illustrating the point that CREDITS can pull your effective rate from one bracket into another bracket (well in this case, the negative bracket)

 

[Fisher]

I understand his claim that he'll cut deductions used by the top bracket is total intellectual dreck, because AMT already does that. Do you?

I have not analyzed the guy's taxes so I don't know if he would be better or worse off without the AMT. My understanding is he gets pass-through rates on Bain as if it were an S-corp with no cap as opposed to being treated like C-corp dividends like it probably should be and would be in most businesses.

 

[joko104]

Other than get more money from everyone anyway possible for the government, can anyone explain Obama's tax plan OR - more importantly - how it is any different from his 2008 tax plan - which he could have gotten in the first year and exactly didn't.

 

[AdamT]

I have not analyzed the guy's taxes so I don't know if he would be better or worse off without the AMT. My understanding is he gets pass-through rates on Bain as if it were an S-corp with no cap as opposed to being treated like C-corp dividends like it probably should be and would be in most businesses.

The main thing about Romney's Bain income is that he gets to use the carried interest loophole. Otherwise he would probably be paying at a rate closer to 25% than 14%.

What is the carried interest loophole, and why doesn’t Romney want to close it?

Of course he doesn't want to eliminate THAT loophole.

 

[Fisher]

The main thing about Romney's Bain income is that he gets to use the carried interest loophole. Otherwise he would probably be paying at a rate closer to 25% than 14%.

What is the carried interest loophole, and why doesn’t Romney want to close it?

Of course he doesn't want to eliminate THAT loophole.

I've benefited from this "loophole" on a much much smaller scale. When land held in a fictitious entity like a LLC gets sold, it allows me to still pay cap gains rates instead of income rates on the amount above my basis without having to deed the property out to myself first. It insures the integrity of the liability shield. I am just not sure with the scale of Bain's operations if they should be allowed the same benefits of smaller entities.

 

[head of joaquin]

I have not analyzed the guy's taxes so I don't know if he would be better or worse off without the AMT. My understanding is he gets pass-through rates on Bain as if it were an S-corp with no cap as opposed to being treated like C-corp dividends like it probably should be and would be in most businesses.

You don't have to analyze a return to know that a top bracket taxpayer is always better off without AMT. That's why we established AMT.

In any case, Romney's plan is pure rubbish since AMT already phases out most deductions for the top bracket. You do realize that, don't you? Or do you just not want to say it outloud.

 

[head of joaquin]

The main thing about Romney's Bain income is that he gets to use the carried interest loophole. Otherwise he would probably be paying at a rate closer to 25% than 14%.

What is the carried interest loophole, and why doesn’t Romney want to close it?

Of course he doesn't want to eliminate THAT loophole.

And of course he should be paying the top rate of 38%, but of course the GOP blocked that reform. The idea of rewarding hedgefund managers as risk takers is utterly and completely bizarre. It's like having a special rate for people who spend millions on roulette.

 

[The Barbarian]

Can you point out where you're getting the 7 million worth of deductions. I found $7,400, and I agree that his investment income was 13.7 million, but that's different than his taxable income.

Look I don’t know what you are asking or why .. . According to the one article Romney paid 1.95 million in taxes …. They say his rate was 14.1% that means his taxable income that he in fact paid taxes on was 13.7 million

One the first page of his tax return .. It shows his gross income as 20.9 million Now he gave 2.25 million to charity. That means he somehow got his taxable income down 5 million more dollars.

I’m not sure how he done that, but in my simple world, it would be through deductions. Deductions that could be taken away. In a tax reform bill.

 

[The Barbarian]

And of course he should be paying the top rate of 38%, but of course the GOP blocked that reform. The idea of rewarding hedgefund managers as risk takers is utterly and completely bizarre. It's like having a special rate for people who spend millions on roulette.

Again a pure lot of bullchit ... the GOP in no way shape or form ... block that reform, in 2010 when Dem's held both houses and had a Dem. President these exiting tax rates were due to expire. The GOP could do nothing to stop that .. do you understand the word "NOTHING"..... The only way anything could extend those tax cuts is if the Dem's brought it up that was the "ONLY" way there could even be a vote on it.

 

[The Barbarian]

The main thing about Romney's Bain income is that he gets to use the carried interest loophole. Otherwise he would probably be paying at a rate closer to 25% than 14%.

What is the carried interest loophole, and why doesn’t Romney want to close it?

Of course he doesn't want to eliminate THAT loophole.

But you can’t deny, that if that loophole was taken away, and the base tax is reduced by 20% that it could be revenue neutral. Or at the very least very close to it , So in fact what Romney is saying , could in fact happen.

 

[The Barbarian]

Other than get more money from everyone anyway possible for the government, can anyone explain Obama's tax plan OR - more importantly - how it is any different from his 2008 tax plan - which he could have gotten in the first year and exactly didn't.

I'm sorry to say you can ask this question all day, and you will never get an answer, because after you tax the wealthy another 4% there is no plan in place and those on the left can't deny there is no plan other then that. So they will ignore it... and deflect by going after Romney's plan .. it's seems to the the lefts mantra .. deny and destroy, because they have nothing else

 

[The Barbarian]

I understand his claim that he'll cut deductions used by the top bracket is total intellectual dreck, because AMT already does that. Do you?

Can’t argue with someone that thinks he is right in spite of the facts .

But there are the “facts”

Romney’s gross income was 20.9 million …. . That is a fact
Romney claimed a 2.25 million dollar deduction to charity … that is a fact
Romney paid taxes on 13.7 million dollars … that is a fact
Romney reduced his income by another 4.95 million dollars(other then chartable deduction) that is a fact,.

Here is another fact … call it deductions or anything you want, but he could put a stop to the way he reduced his income by that 4.95 million and lower the overall tax rate and have it come out nearly neutral or neutral

Here is another fact … there isn’t a person of wealth that is going to say a single word about it .. If you pay 2 million in taxes under the present system .. Or you pay 2 million in taxes under a new system they don’t care ..

 

[The Barbarian]

Actually it was. The bail out, and two wars. Most of the debt.

But keep spinning.

Meanwhile now IS the time to take on debt, since rates are so low.

Then 2012 is all on Obama ... and that is still well over 4 trillion in added debt ... over four years .. not much below Bush's 8 years .. yep I can see how liberals that were complaining about Bush's spending over his 8 years suddenly are proud of such a record .. in the liberal mind anyways

 

[jonny5]

Actually most of that was Bush's debt. But if you're saying we should borrow money when rates are at historic lows and plough that into productivity by rebuilding the infrastructure neglected by Bush and his wrecking crew, yep, nows the time to do that.

No, most of it was Obamas debt (and congress). Thats why his name is on the spending bills.

 

[jonny5]

I agree with pretty much everything you say here, except for timing.

Yes we need to cut the deficit, yes we need higher taxes for everyone, and yes we need to cut back on government benefits and entitlements... Just not quite yet.

GDP is a measure of government spending + private sector spending - trade deficit. If we cut government spending now, we'll dig ourselves right back into a recession. It's like running a business, too much debt is bad, but there's a time when you don't have much of a choice.

And Obama HAS done something. Some of the credit should go to the GOP congress as well, but Obama has cut the deficit by quite a bit.

Not quite a bit, but a tiny bit.

Deficit

2008 -458,553
2009 -1,412,688
2010 -1,293,489
2011 -1,299,595
2012 estimate -1,326,948

 

[jonny5]

The 2009 budget is the last budget done under the Bush administration. So Obama came in with a 1.4 trillion dollar deficit, and currently has a 1.0T dollar deficit for a reduction of 400 Billion or about a 30% reduction.

Again

Deficit

2008 -458,553
2009 -1,412,688
2010 -1,293,489
2011 -1,299,595
2012 estimate -1,326,948

http://www.whitehouse.gov/omb/budget/Historicals/

 

[ALNative]

Here is something to consider. According to NBC news, a senior Romney advisor who did not want his name given was asked this simple question "Name one tax loophole that your candidate will close if he is elected". The Romney person could not answer the question.

Well hoorah, neither could Obama.

 

[ALNative]

Romney has not tax plan! He will continue to bob and weave until the election hoping the American people are stupid enough to believe what he says lately rather than what he has done or said in the past.

And Obama will fix it by "tax the rich", "tax the rich" and "tax the rich"!

 

[AdamT]

But you can’t deny, that if that loophole was taken away, and the base tax is reduced by 20% that it could be revenue neutral. Or at the very least very close to it , So in fact what Romney is saying , could in fact happen.

Well, first of all, the carried interest loophole is mostly employed by a tiny number of fabulously wealth individuals, so it doesn't relate to the over all 20% rate cut. And second, Romney has not proposed that we eliminate the carried interest loophole.

 

[AdamT]

Again

Deficit

2008 -458,553
2009 -1,412,688
2010 -1,293,489
2011 -1,299,595
2012 estimate -1,326,948

Historical Tables | The White House

Those are old numbers. CBO | The Federal Budget Deficit Totaled $1.1 Trillion in 2012, CBO Estimates

 

[Mithros]

Not quite a bit, but a tiny bit.

Deficit

2008 -458,553
2009 -1,412,688
2010 -1,293,489
2011 -1,299,595
2012 estimate -1,326,948

The number for 2012 is old. It's "down" to 1.1-1.0 depending on the math.

 

[Mithros]

Look I don’t know what you are asking or why .. . According to the one article Romney paid 1.95 million in taxes …. They say his rate was 14.1% that means his taxable income that he in fact paid taxes on was 13.7 million

One the first page of his tax return .. It shows his gross income as 20.9 million Now he gave 2.25 million to charity. That means he somehow got his taxable income down 5 million more dollars.

I’m not sure how he done that, but in my simple world, it would be through deductions. Deductions that could be taken away. In a tax reform bill.

It just means his investment income doesn't account for all of his income.

I'd only make it a point to point out that people who make as much as Romney do don't generally use deductions to reduce their tax burden. Because capital gains only need be reported as they're realized, they either A) find methods to avoid realizing gains, or B). offset gains with prior losses.

The point being that they greatly benefit from a reduction in the tax rates, and aren't really hurt by removing their deductions. That's why a 20% across the board rate cut ends up being a significant tax cut for those at the top even if you removed all of their deductions.

 

[jonny5]

The number for 2012 is old. It's "down" to 1.1-1.0 depending on the math.

So, the point is still the same. Obama did not reduce the deficit by quite a bit. He increased it to 1.4 trillion, and then when Republicans came in, they forced the govt to stop increasing it, allowing the evil corporations to catch up with taxes. Outlays have barely changed. The govt is still spending almost twice as much as before Obama took office.

The decline in the deficit stems largely from an increase in revenues. Revenues were about 6 percent higher in fiscal year 2012, driven in part by a significant influx of corporate income tax receipts. Outlays were about 2 percent lower than they were last year.

 

[Mithros]

So, the point is still the same. Obama did not reduce the deficit by quite a bit. He increased it to 1.4 trillion, and then when Republicans came in, they forced the govt to stop increasing it, allowing the evil corporations to catch up with taxes. Outlays have barely changed. The govt is still spending almost twice as much as before Obama took office.

It depends how you measure it. Obama didn't increase the deficit to 1.4 Trillion. The US fiscal year is October 1-September 1. That means the 2009 budget was already set and in place for almost 5 months when Obama took office. Furthermore, Obama moved the cost of the wars from emergency measures to actual budgetary items. That means that the deficits included the real long term costs of the war.

So Obama did lower the deficit between 300-400 Billion dollars which is a near record amount in dollars, but much less impressive number in percentage.

It's a fair talking point, but it's not a significant accomplishment.